Indian banks are facing a significant slowdown in earnings growth, potentially halving to 6.5% in FY26 due to a cautious economy and reduced core profits. Muted credit demand, high deposit costs, and RBI’s measures to control unsecured lending contribute to this deceleration. However, a rebound to 16.1% is expected in FY27 with anticipated rate cuts and improved demand.
RBI eases restrictions on cash credit accounts, eases current account norms
The Reserve Bank of India has lifted all restrictions on banks opening and maintaining cash credit accounts, offering greater flexibility for short-term working capital loans.